Dish May See Q1 Sub Loss: Analyst


A Wall Street analyst Friday forecast that Dish Network may post a subscriber loss in the first quarter, because a number of cable companies and DirecTV have taken a bigger slice of the pay-TV customer “pie” so far this year.

Sanford C. Bernstein & Co. analyst Craig Moffett issued a bearish report on prospects for Dish Network, which will report its first-quarter results next Tuesday.

“Based on net subscriber results reported in the Pay TV sector thus far, we believe that the risk to subscriber expectations for Dish has significantly increased,” Moffett wrote. “We believe a subscriber loss is possible.”

Earlier this week, both DirecTV and Cablevision Systems reported stronger-than-expected subscriber gains, news that came on top of prior customer gains by cable companies such as Time Warner Cable and Mediacom Communications, and the phone companies Verizon and AT&T.

“A week ago, we argued that the telcos and cable MSOs had taken a bigger slice of the pay TV pie than expected, and that at the same time, a weak housing market has made the pie smaller,” Moffett wrote. “We concluded that there was therefore less ‘pie’ for satellite…we believe the short-term risks to Dish Network have increased appreciably.”

Citing the recent subscriber gains at DirecTV, several cable operators and the telcos, Moffett said, “The market appears to have decided that we are witnessing a rising tide that is lifting all boats.”

But Moffett doesn’t see that tide lifting Dish Network.

“We conclude that any subscriber gain for Dish Network in Q1 would already have to assume extraordinary organic market growth from incremental Pay TV penetration... presumably attributable to early impact of the DTV transition,” he wrote.